Private firms behind the endless EAC trade wars, reveals PS Desai

 

Principal Secretary East African Community and integration, Dr. Kevit Desai. [Omondi Onyango, Standard]

Private companies are to blame for constant trade wars between the East African Community (EAC), a top government official has said.

In an interview with The Standard, the EAC and Regional Development Principal Secretary Kevit Desai said although there have been tremendous efforts to harmonise non-tariff barriers (NTBs) to ease the tensions, some private companies have wanted to play monopoly at the expense of others.

“We have had instances where individual interests and unfair market play have provoked individual member States to impose bans on some exports or imports. This has solely been to protect the local markets,” said Mr Desai.

The PS said although such tensions will always prop up, the EAC member States must ensure the challenges are dealt with in cooperation with the private sector.

He said such mitigations must also consider the provision of competitiveness of each country. “My view is that we must allow the national systems to work so that such issues are dealt with conclusively,” he observed. Kenya, Uganda and Tanzania have been embroiled in trade wars which have sometimes escalated into a diplomatic spat.

In December last year, Nairobi imposed a ban on eggs from Kampala which quickly escalated into a diplomatic spat, with Uganda retaliating by restricting some of Kenya’s raw and processed agricultural products.

This saw the Council of EAC ministers meet in Nairobi to address the issues.

Desai however said the development of trade and market access is dynamic because the cost of inputs changes, affecting the cost of production, innovation and efficiency and market access.

Such dynamics, he noted, have an impact on policy regulations, standards and ecosystems. “What we have seen is a healthy sign of engagement and through consensus, most of the issues have been resolved,” he said.

“In the path of progress, there will always be challenges that are inclined to trade agreements between sovereign States.”

He said all issues can be resolved including products verification within the scope of export and import. “As a result, misunderstandings cropped up but above all, we must view it from the collective understanding, work on reducing the NTBs and create a seamless ecosystem for the prosperity of these member states,” he said.

Desai said with a transformative transport system and the formation of the East Africa Transport Association and East Africa Manufacturers Association will help in ensuring balance in terms of policy regulation and standards while boosting foreign direct investment.

“For instance, the East Africa Court of Justice’s has been equipped with enough personnel who have done a good work in handling disputes under the EAC perspective,” said Desai.

Despite EAC having policies that allow for free movement of people, goods and services, some States have demanded work permits which have derailed the implementation of the policies.

Desai said, as a result, there has been no consensus on the existing policies.

Each State has its policies and protocols that are implemented at a different level. Currently, Desai said work is in progress for the harmonisation of occupation standards amid efforts to promote equitability across the region.

“So far we are piloting with academic levels of engineers, doctors, scientists. This to us will be a great incentive to creating a level playground,” he said. He urged the region to focus on key transport corridors that can promote integration while easing goods clearance.

He said Covid-19 had fragmented trade between manufacturers, transporters, logistic providers and market access which resulted to trade wars that were experienced at the border points.

According to Desai, EAC member States had to put measures in place to ensure all activities are anchored to the WHO containment protocols.

The PS said new protocols and delays in clearance saw countries experience  80km snarl-ups that caused discomfort to locals. He said the EAC is contemplating the establishment of the Customs Union, noting that harmonisation of the common currency remains a challenge as countries have different levels of implementation.

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